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(NEW YORK) — The Federal Reserve held interest rates steady on Wednesday, ending a string of three consecutive quarter-point rate cuts as the central bank grapples with a combination of elevated inflation and sluggish hiring.

The move marked the first interest-rate decision since news surfaced earlier this month of a federal criminal investigation into Fed Chair Jerome Powell.

The choice to maintain interest rates at their current level aligned with a cautious approach outlined by Powell last month, before reports of the investigation into his conduct.

“We’re well positioned to wait and see how the economy evolves,” Powell said at a press conference in Washington, D.C., on Dec. 10.

The benchmark rate stands at a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.

Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in June and a second in the fall, according to CME FedWatch Tool, a measure of market sentiment.

The investigation into Powell ratcheted up an extraordinary clash between the nation’s top central banker and the White House, which has urged the Fed to significantly reduce interest rates.

The federal probe appears to center on Powell’s testimony to Congress last year about cost overruns in a multi-billion-dollar office renovation project. Powell, who was appointed by Trump in 2017, issued a rare video message earlier this month rebuking the investigation as a politically motivated effort to influence the Fed’s interest rate policy.

The investigation follows months of strident criticism leveled at the Fed by Trump. The president denied any involvement in the criminal investigation during a brief interview with NBC News hours after the Fed posted Powell’s video.

Over the past year, hiring has slowed dramatically while inflation has remained elevated, risking an economic double-whammy known as “stagflation.” Those conditions have put the Fed in a difficult position.

The central bank must balance a dual mandate to keep inflation under control and maximize employment. To address pressure on both of its goals, the Fed primarily holds a single tool: interest rates.

The strain on both sides of the Fed’s mandate presents a “challenging situation” for the central bank, Powell noted last month.

“There’s no risk-free path for policy as we navigate this tension between our employment and inflation goals,” Powell said.

If the Fed raises interest rates as a means of protecting against elevated inflation, it risks a deeper slowdown of the labor market. On the other hand, by lowering rates to stimulate hiring, the Fed threatens to boost spending and worsen inflation.

The criminal investigation into Powell raised concern among some analysts and former top Fed officials, who said it poses a threat to central bank independence.

In the event a central bank loses independence, policymakers tend to favor lower interest rates as a means of boosting short-term economic activity, analysts previously told ABC News. Such a posture could pose a major risk of yearslong inflation fueled by a rise in consumer demand, untethered by interest rates.

Federal law allows the president to remove the Fed chair for “cause” — though no precedent exists for such an ouster. Powell’s term as chair is set to expire in May, but he can remain on the Fed’s policymaking board until 2028. Powell has not indicated whether he intends to remain on the board.

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(NEW YORK) — The Federal Reserve on Wednesday is set to announce its latest decision on the level of interest rates, marking its first rate move since news surfaced of a federal criminal investigation into Fed Chair Jerome Powell.

The investigation ratcheted up an extraordinary clash between the nation’s top central banker and the White House, which has urged the Fed to significantly reduce interest rates.

The central bank is widely expected to hold interest rates steady on Wednesday. The anticipated move would end a string of three consecutive quarter-point rate cuts, aligning with a cautious approach outlined by Powell last month, before reports of the investigation into his conduct.

“We’re well positioned to wait and see how the economy evolves,” Powell said at a press conference in Washington, D.C., on Dec. 10.

Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in June and a second in the fall, according to CME FedWatch Tool, a measure of market sentiment.

The federal probe appears to center on Powell’s testimony to Congress last year about cost overruns in a multi-billion-dollar office renovation project. Powell, who was appointed by Trump in 2017, issued a rare video message earlier this month rebuking the investigation as a politically motivated effort to influence the Fed’s interest rate policy.

The investigation follows months of strident criticism leveled at the Fed by Trump. The president denied any involvement in the criminal investigation during a brief interview with NBC News hours after the Fed posted Powell’s video.

Over the past year, hiring has slowed dramatically while inflation has remained elevated, risking an economic double-whammy known as “stagflation.” Those conditions have put the Fed in a difficult position.

The central bank must balance a dual mandate to keep inflation under control and maximize employment. To address pressure on both of its goals, the Fed primarily holds a single tool: interest rates.

The strain on both sides of the Fed’s mandate presents a “challenging situation” for the central bank, Powell noted last month.

“There’s no risk-free path for policy as we navigate this tension between our employment and inflation goals,” Powell said.

If the Fed raises interest rates as a means of protecting against elevated inflation, it risks a deeper slowdown of the labor market. On the other hand, by lowering rates to stimulate hiring, the Fed threatens to boost spending and worsen inflation.

The criminal investigation into Powell raised concern among some analysts and former top Fed officials, who said it poses a threat to central bank independence.

In the event a central bank loses independence, policymakers tend to favor lower interest rates as a means of boosting short-term economic activity, analysts previously told ABC News. Such a posture could pose a major risk of yearslong inflation fueled by a rise in consumer demand, untethered by interest rates.

Federal law allows the president to remove the Fed chair for “cause” — though no precedent exists for such an ouster. Powell’s term as chair is set to expire in May, but he can remain on the Fed’s policymaking board until 2028. Powell has not indicated whether he intends to remain on the board.

Editor’s note: This story has been updated, and will be updated again with the Fed’s rate decision.

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(NEW YORK) — Tech giant Amazon said on Wednesday it planned to cut about 16,000 employees as it seeks to “strengthen” its business by reducing “layers” and “bureaucracy” within its workforce.

“The reductions we are making today will impact approximately 16,000 roles across Amazon, and we’re again working hard to support everyone whose role is impacted,” Beth Galetti, a senior vice president, said in an email to staff, according to the company.

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(NEW YORK) — The Federal Reserve on Wednesday is set to announce its latest decision on the level of interest rates, marking its first rate move since news surfaced of a federal criminal investigation into Fed Chair Jerome Powell.

The investigation ratcheted up an extraordinary clash between the nation’s top central banker and the White House, which has urged the Fed to significantly reduce interest rates.

The central bank is widely expected to defy President Donald Trump’s wishes, opting instead to hold interest rates steady. The anticipated move would end a string of three consecutive quarter-point rate cuts, aligning with a cautious approach outlined by Powell last month, before reports of the investigation into his conduct.

“We’re well positioned to wait and see how the economy evolves,” Powell said at a press conference in Washington, D.C., on Dec. 10.

Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in June and a second in the fall, according to CME FedWatch Tool, a measure of market sentiment.

The federal probe appears to center on Powell’s testimony to Congress last year about cost overruns in a multi-billion-dollar office renovation project. Powell, who was appointed by Trump in 2017, issued a rare video message earlier this month rebuking the investigation as a politically motivated effort to influence the Fed’s interest rate policy.

The investigation follows months of strident criticism leveled at the Fed by Trump. The president denied any involvement in the criminal investigation during a brief interview with NBC News hours after the Fed posted Powell’s video.

Over the past year, hiring has slowed dramatically while inflation has remained elevated, risking an economic double-whammy known as “stagflation.” Those conditions have put the Fed in a difficult position.

The central bank must balance a dual mandate to keep inflation under control and maximize employment. To address pressure on both of its goals, the Fed primarily holds a single tool: interest rates.

The strain on both sides of the Fed’s mandate presents a “challenging situation” for the central bank, Powell noted last month.

“There’s no risk-free path for policy as we navigate this tension between our employment and inflation goals,” Powell said.

If the Fed raises interest rates as a means of protecting against elevated inflation, it risks a deeper slowdown of the labor market. On the other hand, by lowering rates to stimulate hiring, the Fed threatens to boost spending and worsen inflation.

The criminal investigation into Powell raised concern among some analysts and former top Fed officials, who said it poses a threat to central bank independence.

In the event a central bank loses independence, policymakers tend to favor lower interest rates as a means of boosting short-term economic activity, analysts previously told ABC News. Such a posture could pose a major risk of yearslong inflation fueled by a rise in consumer demand, untethered by interest rates.

Federal law allows the president to remove the Fed chair for “cause” — though no precedent exists for such an ouster. Powell’s term as chair is set to expire in May, but he can remain on the Fed’s policymaking board until 2028. Powell has not indicated whether he intends to remain on the board.

Copyright © 2026, ABC Audio. All rights reserved.

(NEW YORK) — Mortgage rates whipsawed in recent weeks as markets reacted to a flurry of policies from the Trump administration.

It began with a major milestone. Mortgage rates earlier this month fell below 6% for the first time in nearly three years, according to a data released by Mortgage News Daily.

“The progress stems directly from President Trump’s aggressive agenda to restore the American Dream of homeownership,” the White House touted in a statement on Jan. 12. The Trump administration cited its announcement days earlier, calling on government-sponsored mortgage lenders to purchase $200 billion in mortgage-backed securities.

Within little more than a week, however, mortgage rates had climbed to 6.21%, responding to rattled bond markets and erasing the previous reduction. The uptick came as Trump issued a tariff threat to European allies over his demands to acquire Greenland at the time. When Trump backed off of that levy soon afterward, mortgage rates fell but remained above previous lows, Mortgage News Daily data showed.

The volatility in mortgage rates underscored the risks posed by recent trade tensions, which threaten to push up Treasury yields and, in turn, drive mortgage rates higher, some analysts told ABC News.

Still, they added, mortgage rates will likely face downward pressure this year from anticipated interest-rate cuts at the Federal Reserve, and Trump may take further steps of his own to reduce borrowing costs.

“President Trump is certainly not sitting back and doing nothing,” Susan Wachter, a professor of real estate at University of Pennsylvania’s Wharton School of Business, told ABC News.

“Some of it is big things on the international front, which are potentially destabilizing. And there’s an attempt to do anything and everything for the affordability of housing,” Wachter added.

To be sure, average 30-year mortgage rates have dropped from 7.08% to 6.17% since Trump took office, according to Mortgage News Daily. That drop-off owes in part to a post-pandemic cooldown of inflation, which allowed the Federal Reserve to begin lowering interst rates.

In a social media post earlier this month, Trump said lower mortgage rates would “make the cost of owning a home more affordable. It is one of my many steps in restoring Affordability.”

Mortgage rates closely track the yield on a 10-year Treasury bond. Since bonds pay a given investor a fixed amount each year, the specter of inflation risks higher prices that would eat away at those annual payouts. In turn, bonds often become less attractive in response to economic turmoil. When demand falls, bond yields rise.

U.S. Treasury yields jumped last week in the aftermath of Trump’s tariff threat over Greenland, which appeared to presage a possible trade war with several European allies.

The 10-year Treasury yield climbed as high as 4.3% in the aftermath of Trump’s threat, before dropping steadily down to 4.21% as Trump withdrew the levy and backed negotiations over Greenland, MarketWatch data showed.

As tensions rose in response to Trump’s tariff threat, some major U.S. bondholders in Europe appeared poised to sell. A Danish pension fund, AkademikerPension, said last Tuesday it would unload U.S. treasuries by the end of the month. It remains unclear whether other European bondholders will follow suit, especially after Trump’s reversal on tariffs.

If a substantial share of U.S. bondholders were to sell off their assets, it would slash demand and push up bond yields, some analysts said.

Since 30-year mortgage rates and other key interest rates track the yield on 10-year treasury bonds, a selloff of treasuries could bring about higher monthly payments for home loans, Raymond Robertson, a professor of trade, economics and public policy at Texas A&M University, told ABC News.

“It’s a pretty big concern,” Robertson said.

Marc Norman, associate dean at the New York University School of Professional Studies and Schack Institute of Real Estate, said bondholders are evaluating the reliability of U.S. government debt.

“Basically, it’s a bet on the U.S. government,” Norman told ABC News. “If that becomes unstable and people lose trust, it could have a big effect.”

Despite the uptick in mortgage rates in recent weeks, borrowing costs for homebuyers remain markedly lower than where they stood a year ago.

Analysts attributed the drop to a series of interest rate cuts at the Fed, as well as Trump’s order calling on Fannie Mae and Freddie Mac to buy hundreds of billions of dollars in mortgage-backed securities. After the order, Bill Pulte, the head of the Federal Housing Finance Agency, instructed Fannie Mae and Freddie Mac to up their bond investments in an effort to put downward pressure on mortgage rates, the Associated Press reported last week.

By ordering a federal agency to buy up some mortgage-backed securities, the Trump administration helped increased demand for the underlying loans, which pushed bond yields lower, Wachter said.

“This mortgage bond proposal is not a big move but it makes a difference,” Wachter added. Wachter said she expects mortgage rates to fall further over the course of this year, though she acknowledged ongoing risk: “Investors don’t like uncertainty.”

Still, Wachter said, “If you’re looking to buy a home, today is as good a day as any.”

If homebuyers move forward with a purchase but later find that mortgage rates have continued to fall, they can opt to refinance their homes. “The old saying is, ‘You marry the home and you date the mortgage,'” Wachter said.

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Gold soared to a new record high on Monday, topping $5,000 per ounce for the first time ever as investors rushed toward the safe-haven asset amid geopolitical unrest.

The latest uptick continued a blazing-hot stretch for gold. Over the past year, the price has climbed 83%, far outpacing a 14% jump in the S&P 500 during that period. In early trading on Monday, the price of gold stood at $5,077 per ounce.

Silver prices also climbed on Monday, jumping about 8% in the early hours of trading. The price of silver stood at $110 an ounce as of Monday morning.

Heightened geopolitical and economic uncertainty have boosted demand for gold and silver, which typically display a degree of independence from movements in stock prices, some analysts previously told ABC News. Volatility in bond markets and a devaluation of the U.S. dollar, meanwhile, have unsettled alternative assets typically viewed as safe-haven investments.

The labor market has slowed in recent months, while inflation has hovered nearly a percentage point higher than the Federal Reserve’s target rate of 2%.

Meanwhile, geopolitical conflict looms amid negotiations over Greenland, U.S.-backed leadership in Venezuela and the ongoing war between Russia and Ukraine.

Over the weekend, President Donald Trump threatened 100% tariffs against Canada if the country pursues a trade deal with China. In response, Canadian Prime Minister Mark Carney said the country has no such plans. Under the terms of a free trade agreement with Mexico and the United States, Canada cannot seek trade agreements with nonmarket economies unless it provides notification ahead of time, Carney said.

Precious metals are widely viewed as a hedge against geopolitical unrest because the millennia-old stores of value are perceived as investments that could outlive calamity.

The flight to gold in moments of market turbulence draws on decades of evidence, according to an analysis co-authored in 2025 by Campbell Harvey, a professor at Duke’s Fuqua School of Business who studies commodity prices. The price of gold moved higher during eight of the last 11 major stock market selloffs stretching back to the late 1980s, researchers found.

However, gold and silver prices carry volatility of their own, especially when buyers enter the market at a high point, risking losses instead of providing a security blanket.

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(NEW YORK) — Stocks closed markedly higher on Wednesday after President Donald Trump backed off of tariff threats over Greenland. The major indexes recovered most of the losses they suffered the day before amid trade tensions centered on the Danish territory.

The Dow Jones Industrial Average climbed 588 points, or 1.2%, while the S&P 500 jumped 1.1%. The tech-heavy Nasdaq increased 1.1%.

U.S. stocks surged on Wednesday afternoon after Trump said he would retract his proposed tariff, which had been set to hit products from seven European Union members, plus the U.K., on Feb. 1.

Earlier in the day, stocks ticked up but remained relatively muted after Trump ruled out use of the military in his push for Greenland during a speech at the World Economic Forum in Davos, Switzerland.

Minutes after the speech, European lawmakers suspended a trade agreement with the United States over Trump’s then-ongoing tariff threats.

The EU and U.S. struck the trade agreement in July, moving to decrease tariffs on European goods and restore stability to the commercial relationship. At the time, European Commission President Ursula von der Leyen said the agreement “creates certainty in uncertain times.”

European officials described Trump’s new round of levies as a threat to Greenland, a self-governing territory of EU-member Denmark.

Under Trump’s plan, eight European nations – including Denmark, France, Germany and the United Kingdom – were set to be slapped with 10% tariffs beginning on Feb. 1. Those levies are set to escalate to 25% on June 1.

Trump issued a social media post around 2:30 p.m. ET in which he announced he was rolling back the tariff threat on account of a “framework” deal with NATO on Greenland.

“This solution, if consummated, will be a great one for the United States of America, and all NATO Nations,” Trump said, adding that further negotiations would be overseen by Vice President JD Vance and Secretary of State Marco Rubio, among others. The president provided no details about the framework deal he announced.

Stocks climbed within minutes of the social media post. Meanwhile, U.S. Treasury yields fell, reversing an uptick a day earlier.

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(NEW YORK) — European lawmakers on Wednesday suspended a trade agreement with the United States over tariff threats issued by President Donald Trump as part of his push to acquire Greenland.

The announcement came minutes after President Donald Trump reasserted his call for U.S. ownership of Greenland during a speech at the World Economic Forum in Davos, Switzerland.

The speech followed tariff threats issued by Trump days earlier against seven European Union countries, plus the U.K., over the issue.

European leaders, meanwhile, have pushed back on Trump’s ambitions. Greenland is a self-governing territory of the Kingdom of Denmark, a member of the EU.

Members of the Committee on International Trade (INTA) – a body within the European Parliament – hold “unshakable commitment to the sovereignty and territorial integrity of Denmark and Greenland,” European Parliament member Bernd Lange, an INTA chair on EU-US trade relations, said in a statement on Wednesday.

“By threatening the territorial integrity and sovereignty of an E.U. member state and by using tariffs as a coercive instrument, the U.S. is undermining the stability and predictability of EU-US trade relations,” Lange added.

The EU and US struck the trade agreement in July, moving to ratchet down tariffs on European goods and restore stability to the commercial relationship. At the time, European Commission President Ursula von der Leyen said the agreement “creates certainty in uncertain times.”

On Wednesday, Lange said the E.U. would pause the ratification process in response to Trump’s proposed tariffs. Under Trump’s plan, eight European nations – including Denmark, France, Germany and the United Kingdom – will be slapped with 10% tariffs beginning on Feb. 1. Those levies are set to escalate to 25% on June 1, Trump said.

In his speech on Wednesday, Trump ruled out use of the military in his push for Greenland. “We probably won’t get anything unless I decide to use excessive strength and force where we would be, frankly, unstoppable. But I won’t do that,” Trump said.

U.S. stocks slumped on Tuesday in response to the tariffs, with the Dow closing down 870 points, but recovered roughly half of those losses in a rally on Wednesday morning. In Europe, the pan-continental STOXX 600 index ticked slightly lower on Wednesday.

ABC News’ David Brennan contributed to this report.

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(NEW YORK) — Stocks closed down significantly on Tuesday, deepening losses suffered at the outset of trading, after President Donald Trump threatened tariffs on multiple European countries as part of a push for U.S. control of Greenland.

The Dow Jones Industrial Average closed down 870 points, or 1.7%, while the S&P 500 declined 2%. The tech-heavy Nasdaq dropped 2.3%.

Those losses marked a dip from initial trading levels on Tuesday morning, when the Dow had fallen 1.2% and the S&P 500 had declined 1.4%. The Nasdaq had dropped 1.7% at the outset of the trading session.

The selloff came on the first day of trading since Trump announced the new tariffs in a social media post on Saturday.

U.S. treasury yields jumped on Tuesday, suggesting possible concern about economic instability stemming from the confrontation between Trump and European nations.

Since bonds pay a given investor a fixed amount each year, the specter of inflation risks devaluing the asset and, in turn, makes bonds less attractive. When demand for U.S. treasuries falls, bond yields rise.

Under the proposed plan, eight European nations — including Denmark, France, Germany and the United Kingdom — will be slapped with 10% tariffs beginning on Feb. 1. Those levies are set to escalate to 25% on June 1, Trump said.

“This Tariff will be due and payable until such time as a Deal is reached for the Complete and Total purchase of Greenland,” Trump added.

Trump escalated the trade confrontation with Europe on Tuesday, threatening a 200% tariff on French wine if French President Emmanuel Macron opts to forego participation in Trump’s proposed “Board of Peace” for Gaza.

Greenland is a self-governing territory of the Kingdom of Denmark. Trump first raised the prospect of acquiring the minerals-rich island in his first term. Danish and Greenlandic politicians have repeatedly rebuffed such proposals.

European leaders, meanwhile, continued to push back on Trump’s ambitions and publicize their coordination efforts on the issue.

European Commission President Ursula von der Leyen said in a post on X that she met with a bipartisan congressional delegation to discuss both Russia’s war in Ukraine and recent tensions around Greenland.

Von der Leyen said she “addressed the need to unequivocally respect the sovereignty of Greenland and of the Kingdom of Denmark. This is of utmost importance to our transatlantic relationship.”

ABC News’ David Brennan contributed to this report.

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(NEW YORK) — Stocks tumbled in early trading on Tuesday as President Donald Trump threatened tariffs on multiple European countries as part of a push for U.S. control of Greenland.

The Dow Jones Industrial Average fell 735 points, or 1.4%, while the S&P 500 declined 1.5%. The tech-heavy Nasdaq dropped 1.8%.

The selloff came in the first trading session since Trump announced the new tariffs in a social media post on Saturday.

Under the proposed plan, eight European nations — including Denmark, France, Germany and the United Kingdom — will be slapped with 10% tariffs beginning on Feb. 1. Those levies are set to escalate to 25% on June 1, Trump said.

“This Tariff will be due and payable until such time as a Deal is reached for the Complete and Total purchase of Greenland,” Trump added.

Trump escalated the trade confrontation with Europe on Tuesday, threatening a 200% tariff on French wine if French President Emmanuel Macron opts to forego participation in Trump’s proposed “Board of Peace” for Gaza.

Greenland is a self-governing territory of the Kingdom of Denmark. Trump first raised the prospect of acquiring the minerals-rich island in his first term. Danish and Greenlandic politicians have repeatedly rebuffed such proposals.

European leaders, meanwhile, continued to push back on Trump’s ambitions and publicize their coordination efforts on the issue.

European Commission President Ursula von der Leyen said in a post on X that she met with a bipartisan congressional delegation to discuss both Russia’s war in Ukraine and recent tensions around Greenland.

Von der Leyen said she “addressed the need to unequivocally respect the sovereignty of Greenland and of the Kingdom of Denmark. This is of utmost importance to our transatlantic relationship.”

Treasury yields jumped on Monday, suggesting possible concern about economic instability stemming from the confrontation between Trump and European nations.

Since bonds pay a given investor a fixed amount each year, the specter of inflation risks devaluing the asset and, in turn, makes bonds less attractive. When demand for U.S. treasuries falls, bond yields rise.

This is a developing story. Please check back for updates.

ABC News’ David Brennan contributed to this report.

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